Nn School Board To Develop Retirement Program

December 10, 2008|By Cathy Grimes, cgrimes@dailypress.com - 247-4658

NEWPORT NEWS — After weeks of contention and before a packed house, the Newport News School Board approved a proposal to develop a retirement savings program for employees with Philadelphia-based Lincoln Financial Group. Lincoln was chosen by a district committee and was one of three companies that responded to the district's request for proposals to manage the savings accounts, which allow employees to put part of their earnings into an investment program and defer the taxes on those funds.

Before the new contract was signed, employees could choose plans provided by six management companies and employees objected to the change. Board members delayed moving forward with the savings program and considered breaking the contract with Lincoln for three years.

Board member Debbie Johnston said the district may not have done a good job letting employees know there were possibilities for change to their retirement savings programs, but the district followed the state rules and regulations for the proposal and bid selection process.

Johnston said breaking the contract would cost the district.

"At this time I do not think we can afford the litigation and fees," said Johnston.

But Board member Betty Dixon objected to continuing with the contract.

She said the district might have followed the law, but should have contacted and worked with all the existing vendors during the request for proposal process and she wanted the district to reopen the bid process.

"Yes we may have to go to court if we break the contract, but our employees count more than the vendor," she said, adding that the cost of losing teachers would be more than $100,000.

But Dixon was the lone dissenting vote. Board president Teddy Hicks said "full faith and credit" was displayed by the district in the proposal and bid selection process.

"Everyone had an opportunity to respond" to the request for proposals, he said. Hicks said he was not comfortable chancing a lawsuit from Lincoln and wanted the district to move forward to ensure teachers have a plan in 2009.